New Ireland

ZappaFrank

I have a policy with New Ireland Assurance for the last 10years, i think it's called Balance Manger, basically they use my funds to buy stocks and shares. I Got it when i first started work, i didn't want to do it but i was made to. It cost me £50 a month to start with and this year it has increased to 100euro a month. In 2006 i took 4000euro from it, at a time i had 6000 in my poilcy.

Today i rang them up and was told i currently have 4062euro! I'm gutted. Mainly cos as a 19yr old i was forced into taking out a policy by my parents, and also cos i was expecting alot more.

Any way i need advice.

Should i close the policy and cut my losts?
Should i freeze my policy and hope things pick up?
Or should i keep my policy?

solice

ZappaFrank wrote: »

Any way i need advice.

Should i close the policy and cut my losts?
Should i freeze my policy and hope things pick up?
Or should i keep my policy?

Do you need disposable cash? Is there something that you need to buy or pay for? How old are you? Are you likely to become unemployed?

If you can survive without the cash I would suggest leaving it, the markets hit rock bottom a few months back, they seem to have recovered slightly on January-March although they are still not great. But fact is the markets are recovering, slowly but surely.

I say keep doing what you are doing for another 10 years

ZappaFrank

I'm 30. in employment. Not in need of dispsable cash. But i was hoping the money would go some way for a deposite for a house.

Thanks for the advice

silverharp

just for balance , there is no real evidence that prices hit "Rock Bottom" there is no reason that this market could not go lower over the next year. These days cash is not trash

Tomas911

silverharp wrote: »

just for balance , there is no real evidence that prices hit "Rock Bottom" there is no reason that this market could not go lower over the next year. These days cash is not trash

Even if things still drop a bit, they will still go back up soon. It will be awhile before they hit the height they were before but there is no reason why it can't at least double what it is now.
The main problem was worldwide governments didn't act quickly enough to help companies and there wasn't enough scutiny on accounts of large companies and banks. Neither of those slip ups should happen again. Not for awhile anyway. So the shares should progress again.

ZappaFrank

So the advice is to keep paying my 100euro a month and leave it for another 10years or so?

Tomas911

ZappaFrank wrote: »

So the advice is to keep paying my 100euro a month and leave it for another 10years or so?

Put it this way, you already have 4,000 tied up, the worst that can happen is you lose it all, which, is highly unlikely. However if things do start to go bad, it will happen within the year. So you'll lose your 8/900 (100 a month for 8/9 months)
Yet when things start to improve which it will most def within 10 years you will be much better off. But it is important for you not to forget about it. You should keep an eye on it and know when the right time to get out is. Most people were fools for thinking things would keep going up and up, every bubble bursts. Just make sure you set yourself a goal value and get out at that point, don't be greedy.
And like someone else mentioned, you don't need the 4k right now so why take it out.

Spudmonkey

I'm in a similar position, took my bonuses as shares and probably lost more than what I would have had taken the hit in tax... Still though I don't need it either and I'm just gonna leave it in till it recovers. In fact now is probably the best time to start investing in shares.

Oh and don't bother with the house, houses aren't the best investment at the moment. Stick to renting for the moment!!

eamonnm79

ZappaFrank wrote: »

So the advice is to keep paying my 100euro a month and leave it for another 10years or so?

Personally I would get out and buy comodity stocks. But they will probobly charge you a fortune for leaving.
I agree with silverharp, I see another dip on the horizon. The dow was down 2.3% monday.

Drumpot

To the OP.

Sounds like you are in a Balance Managed fund with New Ireland Assurance. This is a medium to high risk fund. The idea is that you want to make over 6% gains per annum on average.

In these kinds of funds you can see , particulary in times like now, your fund value go up and down significantly. I bet your fund was worth 90 - 85% of its current value 2 months ago, as there has been a bit of a recovery.

Whether or not we are out of the worst of the crisis is probable but open to debate. There is nothing to say we wont have another downturn.

Right now people who consider themselves conservative investors should not be asking themselves how much can I make, more how much can I afford to lose.

Firstly, your current investment is not guaranteed.

Secondly, why are you investing in these kind of funds when you appear to have little understanding of what exactly your money is invested in? Im not trying to be sarcastic , more trying to get you to think about your money and think about what you actually want to do with it.

Lastly, whether or not you continue paying into this policy, you should consider some sort of long term savings plan. Perhaps into a bank offering a good interest rate.

The only person who can answer your questions is you, as it depends on what you expect out of your investment.

Should you close the policy and cut your losses?
- Why did you take out the policy? Perhaps it was because of your parents, but now you need to decide whats in your interest.
- Where you not aware that you could lose money?
- What would you do with that money?

Should you freeze your money and hope things pickup?
- Why leave your money to "hope", can you afford to lose it all? The probability of losing it all is slim but still something people should consider.
- If things do pickup would you then start to reinvest? Baring in mind if things (as expected) do pickup in the next couple of months - years, people who decided not to invest now will pay more for the same shares after the bounce back.

Really, if you can afford it and are satisfied with the level of risk you are taking, you should continue to invest in the policy. You are currently buying at unit prices 30% - 40% cheaper then you were paying for them last year. You are in a savings policy with an Insurance company that probably has no penalties on encashment (because of the term you have been in it). And you dont currently need the money.

Many investors will make their money now, when the average Joe is selling up and panicking. Generally (I say this loosely), anybody who has gone this far into a crisis will do better by riding out the storm and staying strong when everybody else is loosing their heads. Its not a guarantee by any means, but I believe its a good rule of thumb to work off.

Review your finances at least once every 2 years, preferably once a year or when something unforeseen affects your financial stabililty.

Good luck with your decision. .

ZappaFrank

Lots of good advice there, and thank you for it.

I think i will ride this one out. At first i was shocked! Back when i was 19 i didn't have a clue what i was signing up too. And cos my investment was so little each month i never paid much attention to it. But now that i am wise up to it i think i will see how things go, it might be a new interest!

Thanks again for the advice!

Any advice for the next 10 years?

Drumpot

ZappaFrank wrote: »

Lots of good advice there, and thank you for it.

I think i will ride this one out. At first i was shocked! Back when i was 19 i didn't have a clue what i was signing up too. And cos my investment was so little each month i never paid much attention to it. But now that i am wise up to it i think i will see how things go, it might be a new interest!

Thanks again for the advice!

Any advice for the next 10 years?

In all fairness you are doing now what we should all do with our money. Try to understand where you are putting your money and be conscious of what you need it for at any given time.

Part of the reason many people find themselves in serious debt is because they simply assume the best and hope the worst doesnt happen. I always use the Roy Keane qoute "Fail to prepare, prepare to fail". I believe in preparing for the worst and hoping for the best. This involves looking at where you are now in life, both financially and personally and trying to give a fairly good account of where you see yourself in the next 5 - 10 years. Take an active role in your finances, yes get professional advice, but try to understand and act on that advice as best you can.

You could be single now and meet somebody in 4 years, get married and have a load of children. You may be single for your life. Either way, your circumstances will change on an ongoing basis.

For example:

Assumption: Your single , No Children, No mortgage but looking for a deposit for a house.

Priority: Save money to pay for a deposit for a house.

Very simple assessment there but to really gauge how you will be able to cope with a mortgage, try to calculate out how much expenses will be with a big loan, utility bills, food bills, maintanence bills etc and try saving that much consistantly over as long a period as you can. Its alot easier said then done and involves alot of discipline but its a good way for people to see how their lifestyle will be effected by a mortgage.

As far as house prices go, your guess is as good as mine. Personally I believe that the worst is over (not in the Bertie "commit suicide if you think worse is down the line") simply because the markets have responded so aggresively to the recession. Note: Im not saying that house prices will not reduce more . .

One of the major factors affecting house prices is unemployment and the actual credit crunch. The knock on affect of banks giving out no credit is mind boggling on so many differant levels, be it business or personal and its difficult to quantify exactly how much this has pushed down the value of houses (remember the value of your house is not necessarily dependent on how much it costs to build, more the supply and demand ratio, In essence demand is low for several reasons, one of the big ones being people just cannot get money to buy!).

Unemployment is assumed to be heading towards 15%, which I believe has been factored in already. That said, be mindful that any property you buy now could lose 20% or more in the next year. BUT, if you are not intending on moving for 10 years or so, I believe that at the minimum you will at least be selling at that time for at least what you bought it for. Thats an opinion as nobody can guarantee exactly what way things will be in 1 , 2 , 3 , 5 , 10 . . years time will be like.

One more suggestion. If you continue to save in your New Ireland Balance Manage fund, consider diversifying your investment with them or by diversifying your savings. Perhaps you could put half of whatever you want to save into New Ireland and half into a regular Bank savings policy, that way you reduce the exposure you have to equities. In the policy itself you can choose to put a percentage of your premium into a differant fund. Perhaps do something like:

20% Cash 20% Gilts 60% Balance Managed

That way you get the upside of 60% good returns on the riskier balance managed fund, but if it collapses your cash and gilts will take some of the pain away from your losses. . . Just another way of looking at your investment . .

Good luck .

ZappaFrank

Thank you all for your much needed advice. i have taked it all in. thanks again

Pride Fighter

I read an article in the Sunday Times. The economist who predicted the recession deals in cash with all of his dealings. Stocks is like gambling at the moment when the odds are against you. Take the cash and put it into a bank that has any interest on it, you will make more than relying on global markets that are volatile at the moment.

Drumpot

Pride Fighter wrote: »

I read an article in the Sunday Times. The economist who predicted the recession deals in cash with all of his dealings. Stocks is like gambling at the moment when the odds are against you. Take the cash and put it into a bank that has any interest on it, you will make more than relying on global markets that are volatile at the moment.

With all due respect investing your money anywhere is gambling, some more educated decisions then others, but gambling none the less.

Invest in cash - Gambling that you might not make returns greater then inflation and your investment returns you less then your original value. People who cannot afford to lose anything on their investment and are happy with modest returns should always have at the minimum some cash deposit.

Invest in Stocks- Gambling that you may not get anything back at all depending where you invest, the upshot can be much much greater then Cash. Trying to predict when to get in and when to get out should be based as much on personal circumstances as educated timing.

Whatever anybody says the shoe doesnt fit all. If I cannot afford to loose anything I shouldnt EVER be in stocks, but if I want to try to get a returns greater then inflation many people would consider it a good time to buy in.

I predict the markets will eventually recover and that people who invest in them just before they start to recover will make the most money. I predict that one day there will be a pandemic that will kill millions of people around the world. Mark those words, eventually I will be right. Predicting a recession in a capitalistic society is like saying I will probably die one day.

We have had the perfect storm that nobody or very very few predicted. Nobody predicted that our recession would coincide with a global recession thats being compared to the 1920's crash.

johnnyskeleton

ZappaFrank wrote: »

I have a policy with New Ireland Assurance for the last 10years, i think it's called Balance Manger, basically they use my funds to buy stocks and shares. I Got it when i first started work, i didn't want to do it but i was made to. It cost me £50 a month to start with and this year it has increased to 100euro a month. In 2006 i took 4000euro from it, at a time i had 6000 in my poilcy.

Just to be clear, in 2006 you had put in approximately €4,200 (€50 * 7 years * 12 months) and had made €1,800 in interest.

ZappaFrank wrote: »

Today i rang them up and was told i currently have 4062euro! I'm gutted. Mainly cos as a 19yr old i was forced into taking out a policy by my parents, and also cos i was expecting alot more.

From 06 to now, you had an opening balance of €2,000 and have put in €1800 since then (24 monthly installments of 50, 6 monthly installments of 100) and you have earned €262 in interest during that time.

You haven't lost any of the capital, and have gained €2k interest over that period. Not an amazing return, but not a bad one - a lot more than if you had it in a deposit account, although it would have been better for the last few years in a regular saver account.

If you think of the amount of people whose investments have dropped significantly, you are doing quite well for yourself.